Shree Ganesh to invest Rs 550 cr to start gold mining in Ghana

Kolkata-based Shree Ganesh Jewellery House will be investing around Rs 550 crore in gold mining activities in the African country of Ghana. The company has formed a 100 per cent subsidiary, Shree Ganesh Ghana, for the purpose.

Shree Ganesh Ghana has been in talks with Precious Minerals Marketing Company (PMMC) Ghana on this. PMMC is the government agency OF Ghana that is mandated with buying and selling gold and diamonds from small-scale miners, producing gold jewellery for sale locally and internationally as well as exporting gold on behalf of third parties for a commission.

“In the last one year, several African countries have opened up their small and medium mining sector for overseas companies. These are companies with a size of less than $100 million revenue. The overseas companies have to invest in providing the necessary infrastructure in these mines. Chinese companies have already started making use of the opportunity,” Umesh Parekh, managing director of Shree Ganesh Jewellery House told Financial Chronicle.

“Initially we will be buying semi-refined gold dore bars from a few mines. Subsequently we will invest in the mining activities. This will include making investments in the infrastructure, machinery, plant, cleaning and washing facilities etc,” he said.

The company has proposed to invest $100 million on providing adequate infrastructure in the mines in three years. In the first year, it will procure one tonne of gold dore bars and scale this up in the subsequent years. The Rs 10,000 crore manufacturer and retailer of gold and diamond studded jewellery procures 25 tonne of gold every year.

Recently the company also started manufacturing activities in Bangladesh. The manufacturing base in Bangladesh will not only serve that market but look at exports to the US market also as the country is a beneficiary under the Generalised System of Preferences (GSP) program of America.

The company, which is heavily dependant on jewellery exports, has off late been investing in domestic retail as well.